Popping open that box is the only compensation I’ll ever get for having written that book, because I’m no longer in the private practice of law (so I can no longer use a publication to try to attract clients) and I negotiated an advance payment to my firm (back when I was a partner at Jones Day) that basically guarantees I’ll never get any royalties from this project. That leaves as compensation only the joy of holding the book in my hands for the first time and the satisfaction of knowing that a few people will find the treatise to be worthwhile.

I’ve now held the book in my hands, so that little thrill is behind me. But the treatise is also worthwhile, and I’ll prove it….

Folks who handle complex litigation know how multidistrict litigation works: Plaintiffs file cases in federal courts all over the country, and the Judicial Panel on Multidistrict Litigation transfers the cases to a single court for coordinated pretrial proceedings. After the pretrial proceedings are over, the MDL Panel transfers the cases back to their home courts for trial.

To save time and effort, parties to MDLs frequently stipulate to so-called “direct filing” provisions. These provisions allow cases to be filed directly in the MDL transferee court, rather than being filed all over the country and then shipped to the transferee court. Thus, instead of insisting that a case be filed in California, transferred (by the MDL Panel) for coordinated pretrial proceedings in New York, and then transferred back to California for trial, the defendant waives any objections to venue and allows the case to be filed directly in New York.

First, direct filing provisions can change the choice-of-law principles that govern a plaintiff’s case. If a case were filed in California and then transferred to New York, California choice-of-law principles would govern the case. If the complaint were instead filed directly in New York, then New York choice-of-law principles may govern. Unless your direct filing stipulation addresses this issue, allowing direct filing may inadvertently change the choice of law (and thus the substantive law) that governs a plaintiff’s lawsuit.

Second, direct filing may change the court that tries a case. Under the Supreme Court decision in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), MDL transferee courts cannot try transferred cases without the parties’ consent; transferred cases must be remanded to their courts of origin for trial. A directly filed case, however, bypasses what otherwise would have been its court of origin; a directly filed case does not get transferred to the MDL transferee court, and there is nowhere for the case to be remanded for trial. This arguably gives the MDL transferee court authority to try the directly filed case.

Third, direct filing changes the reach of the transferee court’s personal jurisdiction. An MDL transferee court’s personal jurisdiction in a transferred case is coterminous with that of the transferor court. [If you want the cites, read footnote 322 of the book.] Thus, when a case is filed in California and transferred to New York for pretrial proceedings, a defendant’s jurisdictional contacts with California determine whether the New York court has personal jurisdiction. But if the same case were directly filed in New York, then presumably the defendant’s jurisdictional contacts with New York determine whether the New York court has personal jurisdiction.

Plaintiffs, of course, consent to personal jurisdiction wherever they file their complaints. And because direct filing probably cannot occur without the defendants’ stipulation, the defendants may have consented to personal jurisdiction, too. But if the California-based case filed directly in New York required the presence of a third-party defendant (such as a physician in a pharmaceutical product liability case or a car dealer in an automotive case), the third-party defendant’s personal jurisdiction challenge could turn on whether the case was transferred to New York by the MDL Panel or directly filed there.

There you have it: A shameless plug for my new book, coupled with some pretty exotic learning about MDL strategy. This column will probably never again be either this shameless or this educational.

Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link). You can reach him by email at inhouse@abovethelaw.com.

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